from the how-the-sausage-is-made dept

Last week, a single three judge panel from the 9th Circuit appeals court heard two key appeals concerning the DMCA, and specifically the DMCA's safe harbors for service providers. Lawyer Michael Barclay attended both appeals and has an excellent report and analysis of each. It's not always easy to read the tea leaves of which way judges are leaning on appeals like this, but based on both appeals, and the details of both cases, if I had to guess, I'd say that the appeals court will uphold both lower court rulings, even if this seems slightly contradictory.

If you're not aware of the details of the two cases, the Veoh case is quite similar to the YouTube/Viacom case. Veoh was a video hosting website that ended up in a lawsuit with Universal Music, who not only sued the company, but sued a bunch of its investors as well (a tactic that the record labels have tried a few times, despite the fact that investors are shielded from liability for the actions of company management for very good reasons: otherwise you'd create a massive chill on investment). The judge wisely tossed the Veoh lawsuit, noting that the company was clearly protected by the DMCA safe harbors, and the separate action against the investors was also shot down. Of course, mainly because of this lawsuit, Veoh ran out of money and was forced to shut down. It ended up selling off its assets to some other company, but a "mystery funder" (I'll give you three guesses...) showed up and continued funding the appeal.

The IsoHunt case is one that has probably received more attention. IsoHunt is one of many BitTorrent search engines out there, and it was sued by the movie studios. Given similar lawsuits, it wasn't much of a surprise when IsoHunt lost, but there were elements of the ruling that were quite troubling. It was really the first big DMCA safe harbor lawsuit to make use of the "red flag" provisions of the DMCA. Most safe harbor cases have focused on whether or not the service provider responded to notices, but in this case, the court said that there were enough "red flags" that, even in the absence of notices, IsoHunt should have blocked certain files. This is problematic for any number of reasons, as it leaves an incredibly vague standard out there that is, in many ways, incompatible with the notice-and-takedown provisions of the DMCA. The only real way to reconcile these would be to say that red flags only apply to very specific infringing works, rather than the fact that infringement takes place on the site. Unfortunately, the court didn't really do that here. It also took certain statements from IsoHunt founder Gary Fung really out of context to support the claim that he was inducing infringement under the Supreme Court's Grokster standard for inducement.

It's interesting to see that IsoHunt's lawyer, Ira Rothken, even referenced the Veoh case in his opening remarks, trying to make the claim that IsoHunt has an even stronger case than Veoh, in that IsoHunt is a pure search engine and, unlike Veoh, doesn't host or control any of the actual content. Separately, he argued that the evidence presented for inducement by Gary Fung came from 2003, but the actual infringement in the case came in 2007 -- and suggested that you can't use general inducement for specific cases of infringement. Apparently, the court was skeptical on this. It would surprise me if the court found that convincing at all, as I don't think anything in previous inducement rulings have ever suggested the inducement has to be directly tied to the infringing files. Anyway, you can listen to the IsoHunt hearing below:

The Veoh hearing, on the other hand, appeared to go pretty strongly in Veoh's favor. Universal Music's argument appeared to be that the DMCA safe harbors are meaningless, because they're kinda annoying for Universal Music. That's a bit of an exaggeration, but not by much -- and the judges aren't buying it. Universal kicks it off by ridiculously claiming that the Veoh ruling would upend copyright law. That's simply not true, and the judges immediately called Universal's lawyer on this, pointing out that copyright law and the case law in the 9th Circuit clearly puts the burden on the copyright holder to file notices, rather than expect service providers to proactively police.

Universal also argued that the DMCA only applies to backend infrastructure service providers, not every other service providers. That's a massive uphill climb there, as no court has ever ruled that. Thankfully, the judges seemed rightfully skeptical, and pointed out that this would decimate the DMCA's safe harbors (exactly what Universal Music and the RIAA wants, of course). Finally, Universal Music tried to argue (again against all sorts of precedent) that since the DMCA was merely locking in common law precedent, vicarious liability could be interpreted broadly. Again, the judges seemed skeptical, noting that this would apparently destroy the DMCA's safe harbors. From Barclay's summary:

Judges Fisher and Berzon had problems with that interpretation. Judge Fisher said that under vicarious liability principles, most commercial web sites would satisfy the “financial benefit” provision, and since in response to a takedown notice they could remove the content, that would satisfy Marenberg’s interpretation of the control provision. Both Judges Fisher and Berzon told Marenberg that under his interpretation, the safe harbor would therefore go away: Judge Berzon told Marenberg his view of the statute “kind of blown the whole thing up.”

We've actually seen a weaker, less legalistic, version of this argument made here many times before. We see people argue all the time that, for example, YouTube must be liable because it makes some money from hosting, and thus is profiting from infringement. Except, that's not what the law says. YouTube isn't profiting from infringement. It's profiting (if it's profiting) from providing a service, which is hosting and displaying videos. It makes that money whether the works are infringing or not. If Universal's interpretation of the safe harbors is correct, there are no more safe harbors online, because any for-profit company loses all safe harbors. That's clearly not what Congress intended.

Either way, you can year the Veoh hearings below as well:

I still think that the appeals court will likely uphold both lower court rulings (though, I'm only about 70% confident on that...), even if it is a bit bizarre when you compare the two. IsoHunt doesn't host or transmit any infringing content. Veoh likely did. And yet Veoh has been deemed protected, while IsoHunt was not. That seems like a questionable outcome no matter what.

Re: Re: Mike is a raporist

So you got to 'Mike is a' before deciding I was joking?

As a side note, infringement is no joking matter. I don't know what this Pioneer One is, but if it was distributed by bittorrent then it must be infringing on someone's copyright. That's stealing. You should be ashamed for even knowing about it.

The only reason I can think of that would explain this huge discrepancy between the rulings is that the entertainment industry has successfully engrained in the public conscience that torrents are solely used for piracy.

There is no other explanation. It is a sad thought and I wish it were not true.

This is the same reason why modding video game consoles and jailbreaking smart phones is looked down upon. Enough powerful people have screamed loudly and long enough that the collective conscience of the people has equated these activities with piracy. It doesn't matter that the origination of console modding came from region coding and people's attempts to bypass it to play imported games. It doesn't matter that jailbreaking smartphones originated with provider lockout and people's attempts to bypass it.

We are in a society that has been almost completely brainwashed to believe anything the movie and music industry wants us to believe. Such a sad sad world.

Re:

"The only reason I can think of that would explain this huge discrepancy between the rulings is that the entertainment industry has successfully engrained in the public conscience that torrents are solely used for piracy."

Public conscience, or public judge's view?

"...modding video game consoles and jailbreaking smart phones is looked down upon"

But they still occur, regardless of what the law says, and people are aware of bad law. Those that will tinker, will modify as necessary.

"We are in a society that has been almost completely brainwashed to believe anything the movie and music industry wants us to believe. Such a sad sad world."

I'm going to disagree. Every last "education" campaign of the last 13 years has fallen flat on its face. It's best summed up in this quote:

You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.

Re: Re:

Public conscience, or public judge's view?

Based on my experience on video game industry websites like Gamasutra.com, I would say it is a public conscience thing. Of course this does not mean that the public is more valuable than a judge's view point. I would agree with you on that.

As for public opinion, I am again basing this on my experience with game industry website discussions.

If you want to get the most reader comments in your article on Gamasutra, there are two topics you can write about. Used game sales and piracy. Anything that looks like a pro argument for those two topics will start a massive flame campaign on either side.

Re: Re: Re: Re:

I have to agree with Zachary, as far as video gaming commentariat goes. He's right - used games and "piracy" discussions (and their ancillary cousin DRM) provoke gigantic arguments. Usually the same old arguments, lol.

There is a huge contingent of "pirates are @#!$% thieves!" and pro-DRM types, also unrepentant "#@%!$ you, I'm stealing then!" types, and the level-headed coming from either camp who are drowned out.

DRM, especially its failures, has made some think a bit more critically about the issue in the past few years, I believe. Folks paying for games are not as willing to stay quiet about bad DRM that only affects them and not the pirates, that complicates selling games on for a few bucks to buy the next new thing.

There's an element of fear that no more video games will get made because of piracy as well, combined with loyalty to games/communities/devs. Fanboism, to be blunt. A form of blinkered thinking, but impressive in its staunch defense.

I'm from the buying customer division: what's good for me is good for devs and publishers. Lately I feel that when it comes to decisions on piracy or used game sales, my division is least considered, and that's all kinds of messed up.

Inducing

The internet is a system made to share information and its by design made to share information. If I induce copyright infrigment on one site then every site is liable for that becourse I don't see website as seperate entities.

My reflection about 13 minutes in to the recording of the hearing when they talk about inducing.

and

Why cant DHS just take the site down? It has done so many times before

It was really the first big DMCA safe harbor lawsuit to make use of the "red flag" provisions of the DMCA. Most safe harbor cases have focused on whether or not the service provider responded to notices, but in this case, the court said that there were enough "red flags" that, even in the absence of notices, IsoHunt should have blocked certain files. This is problematic for any number of reasons, as it leaves an incredibly vague standard out there that is, in many ways, incompatible with the notice-and-takedown provisions of the DMCA. The only real way to reconcile these would be to say that red flags only apply to very specific infringing works, rather than the fact that infringement takes place on the site. Unfortunately, the court didn't really do that here.

I know the "red flag" provision of the DMCA troubles you, and I'm wondering this: Can you provide us with a hypothetical example of something that would qualify as "red flag" knowledge under the DMCA, but wouldn't be actual knowledge? Clearly, the DMCA provides for both. I'm just wondering if you can give us an example of something that isn't actual knowledge, but is "red flag" knowledge.

Re: Re:

Go look up the movie reviews on Thor and then look up the box office take for his mothers day weekend. Guess what it made over 66 million dollar, go figure and that's not including all the money spent popcorn, soda, and pretzel bites with cheese!

Re: Enough With The FUD, Buster!

Personally, I tend to only use bit-torrent (or another torrent) to download things which would not be considered infringement. I do not trust that anything is actually free and so when faced with spending twenty bucks for a movie versus working house removing malware from my PC I spend the twenty bucks. I do use it however to download games when I am directed to by the game developer. Recently while beta testing a game the client was only available as a torrent. I think quite a few more people know that there are both illegal and very legal uses for this technology than are given credit.